Carey Mulligan has won the role of F Scott Fitzgerald's manipulative jazz-age socialite Daisy Buchanan in Baz Luhrmann's forthcoming remake of The Great Gatsby.

The British actor, who was nominated for an Oscar last year thanks to her performance in Lone Scherfig's An Education, reportedly fought off competition from Hollywood luminaries Scarlett Johansson, Natalie Portman, Michelle Williams and Keira Knightley to win the role. Luhrmann is said to have screen-tested her opposite Leonardo DiCaprio, who looks set to play Jay Gatsby. Tobey Maguire will be narrator Nick Carraway.

Luhrmann told Deadline: "There are a few elements that I feel need to be resolved before I would categorically state that this is my next film. Regarding the role of Daisy Buchanan, I was privileged to explore the character with some of the world's most talented actresses, each one bringing their own particular interpretation, all of which were legitimate and exciting. However, specific to this particular production of The Great Gatsby, I was thrilled to pick up the phone an hour ago to the young Oscar-nominated British actress Carey Mulligan and say to her: 'Hello, Daisy Buchanan.'"

Mulligan was apparently walking the red carpet at the CFDA/Vogue Fashion Fund awards in New York at the time and reacted by bursting into tears in front of the assembled press and designers including Karl Lagerfeld.

The Great Gatsby chronicles a young midwestern man's entanglements with a wealthy circle of hedonistic east-coast aristocrats – including the titular character, who is the host of regular, wild New York parties. While not popular upon its initial publication, the book has gone on to be recognised as a hugely important piece of American literature.

Fitzgerald's tale has been made into a number of films, the most famous of which is Jack Clayton's Academy Award-winning 1974 effort, scripted by Francis Ford Coppola, which starred Robert Redford as Gatsby, Mia Farrow as Buchanan and Sam Waterston as Carraway.